Motorola thinks out of house

Recruiting a network of software innovators to make cell phones do new tricks is the goal of MotoCoder, a new initiative launched Tuesday in Shanghai by Motorola Inc.

While the No. 2 wireless phone-maker will continue to develop new phone features in-house, it is encouraging independent software developers, online gaming companies and wireless carriers to create applications for its phones.

At its developers meeting in Shanghai this week, Motorola is providing technical "tool kits" to help optimize programs for the Schaumburg company's phones.

"We want to create an ecosystem to take our products and make them more compelling," said Steve Lalla, Motorola's director of global product marketing.

Using outside developers to create new applications is common in the computer industry. Motorola's initiative demonstrates how Web-enabled wireless phones are becoming more similar to personal computers than to the wireline phone that once dominated communications.

Motorola's competitors, including industry-leading Nokia and No. 3 Ericsson, offer similar help to independent software developers.

Lalla said some wireless phone carriers might incorporate unique Motorola features to work exclusively on their networks. In other cases, software developers might offer consumers applications, such as games or weather graphics, that could be purchased separately.

"It's similar to the PC model," Lalla said.

Cell phone-makers are trying to entice customers to buy new handsets to replace the ones they are using now, said Jeff Kohler, director of wireless banking services at Bathgate Capital Partners in Denver. And wireless carriers want more customers to sign up for their new data-enabled services, which fetch a premium over simple voice service.

"Everyone is counting on new applications to lure customers into spending more," said Kohler. "You want as many developers as possible making new and appealing applications."

Many consumers who buy Web-enabled phones with attractive color screens just use them to make phone calls and do not sign up for the data services, said Kohler.

"One carrier told me that one-third of the phones they sell are used for data while the rest are just being used for voice," Kohler said. "The carriers really want applications that will stimulate existing customers to buy new handsets and upgrade their service."

An example of a new application, Kohler said, is Doppler weather radar, which costs about $3 a month and provides real-time images of weather systems on phones.

Staging forums for software developers has become a requirement for any company that wants outside parties to create new applications, said Jayanthi Rangarajan, whose Arlington Heights-based company, Novarra, modifies Web sites to make them compatible with cell phones.

Palm Inc. "really got a lot of attention doing this, and others took notice," she said. "Wireless phones are trying to be more like PDAs, which means more like personal computers, so this is something they have to do."

Holding its inaugural MotoCoder conference in China makes sense for Motorola, said Douglas Lamont, an author and retired DePaul University professor who does business consulting in China.

"There are about 100 million people in China who can afford to buy third-generation wireless phones," he said. "It's the world's largest market, and Motorola derives 15 percent of its revenues from China."

Unlike North America, where personal computers and laptops are widely used by consumers, most Chinese access the Web from their phones, Lamont said, and the technology is more advanced in China for wireless phones than here.

In the short run, it is very important that new applications be created now because wireless data is in its infancy, he said.

Motorola and other wireless phone-makers have opted for the Java software platform and open systems in part to keep Microsoft Corp. from successfully dominating wireless phone data operations in the same way it dominates personal computing systems, said Delly Tamer, chief executive of LetsTalk.com, an online wireless retailer.

"Nokia, Motorola and some others are sharing information with developers because they want new applications that will appeal to customers," said Tamer. "But this is also a defensive move to keep Microsoft from moving in to take control."